Maryland Trails Peers in Stimulus Spending


WASHINGTON (Feb. 04, 2010) - While Maryland received a larger-than-average share of federal stimulus funds, the state now lags behind others in spending the money and creating jobs.

Almost a year after Congress passed the American Recovery and Reinvestment Act of 2009, Maryland is 15th nationally for stimulus dollars awarded, and 13th in dollars per person, with $4.6 billion at the end of January.

However, Maryland ranks slightly lower in job creation and average in the number of projects underway or completed compared to 11 other states across the country with similar populations, the official Recovery.Gov Web site shows.

A January report from the White House Council of Economic Advisors estimates 36,000 jobs were created or saved in Maryland, compared to a national low of 4,000 in Wyoming and a high of 256,000 in California. The White House measure puts Maryland 21st nationally in job creation, and fourth-lowest of the 12 similarly sized states, above Alabama, South Carolina and Colorado.

By a different measure, also included in the White House report, Maryland recipients of stimulus money reported that 6,748 jobs were created—ranking Maryland 31st in the nation for jobs created and second-lowest among the 12 states.

The White House measure includes jobs created directly or indirectly by stimulus money, while the recipient-reported number is mostly direct jobs. Both measures have come under fire: Some recipients were unclear about how to report jobs created, and the White House changed its counting method in the final quarter of 2009.

Gov. Martin O'Malley's spokesman Shaun Adamec, said that despite the different job tallies, "the Recovery and Reinvestment Act has frankly been a lifeline for most states." He said that Maryland reports show more than 19,000 jobs created, directly or indirectly.

"Those are real, those aren't made-up numbers. Those are people who are employed today because of the Recovery Act," he said.

Adamec also said Maryland officials "acted quickly to invest the funds, to invest them strategically, as they were intended to be invested—to create jobs," adding, "and it's working... there are signs of economic recovery."

Maryland experts agree the stimulus' impact is mixed; while it has provided some immediate and needed relief, it has often been held up by complicated bureaucratic processes.

"Without the stimulus aid, the job loss would have been much worse and the state would have had to make much deeper cuts in education and health," said Neil Bergsman of Annapolis, director of the Maryland Budget and Tax Policy Institute in Baltimore.

Maryland's unemployment rate, at about 7.5 percent, is lower than two-thirds of the country, but has risen almost every month since May 2007. Maryland is also fourth-lowest of the 12 states in the number of stimulus projects at least 50 percent complete.

Bergsman said some groups receiving stimulus funds told him they have been frustrated by bureaucratic red tape. Still, he said he remains positive: "I'm hopeful that we can use this experience to really improve the government contracting processes."

Stimulus funding for education may have helped Maryland avoid major layoffs, but only Alabama and South Carolina among Maryland's peer states reported fewer education jobs created, according to the Department of Education. Maryland reported 2,671 education jobs created, but the top two states, Massachusetts and Missouri, both reported more than 10,000.

Eight of the 12 states were awarded larger amounts for education; broken down by individual funding programs, Maryland received the lowest amount for vocational rehabilitation and the second-lowest amount for Pell grants. Also, Maryland failed to apply for the first round of Race to the Top stimulus grants because of complications with teacher tenure laws, losing potential funds.

Maryland ranks about average in receiving and spending funds on health and energy. Four peer states received more in health funding, including Indiana, Minnesota, Arizona and Massachusetts, according to the Department of Health and Human Services. The latest Department of Energy report shows that Tennessee and South Carolina were awarded the most in energy grants, with Maryland falling in the lower half of the group.

Funding for housing in Maryland is also average among the 12 states; however, a January report from Recovery Watch Maryland said housing funds may not be hitting their targets, because disproportionate funding is going to counties with less-severe needs.

In contrast, transportation spending has been a bright spot for Maryland: O'Malley proudly announced last March that the resurfacing of New Hampshire Avenue was the first recovery project in the nation approved by the Federal Highway Administration.

So far, Maryland has received $638 million for transportation projects, according to Maryland's official recovery site. Jennifer Bevan-Dangel of 1000 Thousand Friends of Maryland, a coalition of businesses and community groups, is hopeful the state will receive even more funding in the next round of grants.

"We have a really once-in-a-lifetime really make permanent the growing shift toward wanting more transportation choices," said Bevan-Dangel.

However, records from the Department of Transportation show that Maryland is about 24th nationally and fourth-lowest among the 12 states in the number of projects with obligated funds, at 173. Three states—Indiana, Wisconsin and Missouri—have already obligated funds to more than 300 projects.

Nationally, Maryland is about 20th in transportation funds awarded, despite lobbying efforts from state agencies for at least $369,000, according to the Center for Public Integrity in Washington.

University of Maryland Professor Peter Morici said spending on infrastructure is a good way to create jobs, but the primary impact of the stimulus is in "helping state governments, including Maryland's, avoid furloughs and layoffs."

The stimulus does not address the core problems of our national economy, Morici said, and while the numbers may sound big, "it's really not a lot of money."

How much more money Maryland will receive this year is partly dependent on whether Congress will pass a second stimulus bill. A $154 billion House bill passed in December, but the Senate is expected to unveil its own version of a jobs bill in early February. The President's fiscal year 2011 budget also contains extensions for many of the original ARRA programs.

Capital News Service contributed to this report.

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